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Posted on 12.14.2015 Under Legislative

Legislative Report for MAT

Judy Augenstein, buy Legislative Consultant

December 2015

Kosowski, remedy Cole Pitch Electric Choice Option

Two lawmakers — a Democrat and a Republican — are trying to strip the energy reform legislation of proposed requirements that choice advocates believe will ultimately scare away alternative suppliers from Michigan.

Rep. Triston COLE (R-Mancelona) and Rep. Robert KOSOWSKI (D-Westland) not only want to preserve the electric choice law as it’s written today.
Kosowski said the schools in his district count on electric choice to keep their electricity bills low. Losing choice is a $400, this 000 proposition for his school district at a time when the district is putting 30 kids in a classroom and more teachers are being let go.
Cole and Kosowski are swimming upstream with their plan to change the legislation that locks the door for electric choice to future applicants and mandates that choice customers wishing to return to a regulated utility live with that decision for at least 15 years.
The bill also mandates that all electric service providers show state regulators every year that it is bringing in enough power to service their clients for the coming few years while also having access to extra electricity for the hot summer days when customers use the most energy.
The version of HB 4298 that moved out of the House Energy Policy Committee is designed to make sure alternative energy suppliers have the supply they need to service their customers, said House Minority Floor Leader Aric NESBITT (R-Lawton).
Also, it’s designed to make sure customers of the state’s utilities — DTE and Consumers — aren’t subsidizing lower rates for the customers of an alternative energy supplier.
On the subject of competitive bidding, Nesbitt said the bill allows the Michigan Public Service Commission (MPSC) to entertain proposals from those who believe they have a cheaper way to provide electricity.
Even though the committee chair opposes the amendment Rep. Cole said it’s in the interest of free market businesses to have an open competitive bid process for new generation while also preserving the state limit of having 10 percent of the state’s electricity coming from an alternative source.
Originally, The bills were to receive final House debate this week,but those plans have been postponed, Nesbitt said, as he works with lawmakers on improving the legislation.
Straight-Ticket Option Elimination Bill Survives Close House Vote
 
After a procedural fight with Democrats and a day of searching for yes votes, House Republicans found just enough to approve ending automatic straight-ticket voting in Michigan.
By a vote of 54-51, Republicans got the minimum amount of support needed to send a revised version of SB 0013 back to the Senate.
Like the Senate version, the bill would still remove the option to automatically vote a straight ticket from ballots. But the House tie-barred SB 0013 and HB 4724, which would bring a form of no-reason absentee voting to the state.
While some Senate Republicans have concerns about it, that tie-bar was championed by House Elections Chair Lisa Posthumus LYONS (R-Alto). And with it in place, the House was still able to pass the bill by only the slimmest of margins.
Two House Republicans were absent for this evening’s vote. Five House Republicans joined all 46 House Democrats in opposition.
Republicans emphasized that elections should be more about individuals than parties. Only nine states still have the automatic straight-ticket option. And Rep. Al PSCHOLKA (R-Stevensville) called the practice “antiquated.”
House Elections Chair Lisa Posthumus LYONS (R-Alto) spoke out for the bill, focusing on the fact that the bill is still tie-barred to a bill to bring a form of no-reason absentee voting to the state.
The question continues to be whether the lawmakers can bridge the gap between Lyons, the House elections chair, who wants the elimination of straight-ticket voting tied to no-reason absentee voting, and Senate Republicans who don’t like the no-reason absentee proposal.
Health Claims Tax OK’d By Senate Approps
 
The Senate Appropriations Committee voted to send to the Senate floor legislation to extend for another eight years a health insurance claims tax that produces about $250 million for the state.
 HB 5105, which passed the House 83-23 Tuesday, would shift the sunset on the Health Insurance Claims Assessment (HICA) from Dec. 31, 2017 to Sept. 30, 2025.
No changes were made to the version passed out of the House Committee. Chair Dave HILDENBRAND (R-Lowell) said the bill would be discussed in caucus soon, adding that there’s a good chance it could get done before the end of the year.
The money HICA currently produces at a .75 percent rate is used along with money from the Use Tax on Medicaid managed care organization to provide the required state match for federal Medicaid dollars. Together, the two produce more than $400 million.
Without HICA, lawmakers would have to find the $250 million it produces somewhere else in the budget or through a different means. And the federal government has already informed the state that Michigan’s Use Tax on Medicaid managed care organization needs to be discontinued by the end of Dec. 31, 2016.
Once the Use Tax is discontinued, the HICA rate would revert back to the original 1 percent rate. The Senate Fiscal Agency projects the bill would increase HICA revenue by $247.5 million in Fiscal Year (FY) 2017-18 and $340 million in FY 2018-19. Savings to the GF are expected to slowly increase over time under the bill until FY 2024-25, the new sunset date.
Business groups such as the Michigan Chamber of Commerce and the Michigan Manufacturers Association (MMA) have opposed the bill on grounds that it keeps an assessment in place that adds to the cost of health insurance.
The administration has expressed support for the legislation.
Senate Appropriations Committee Chair ildenbrand said many Republicans have concerns with the legislation, but pointed out that the sunset extension leaves the HICA assessment open for reconsideration at a later date.
“Everything can always be changed down the road,” he said “This is just a proposal that’s out there now . . . we can get some certainty in the short term, and down the road we can change it if that’s the will of those serving at that time.”
House Appropriations Chair Al PSCHOLKA (R-Stevensville), the sponsor of the bill, pushed back against the argument made by business groups like the Michigan Chamber of Commerce that the bill is a tax increase.
Instead, Pscholka said the proposal is a freeze on the HICA rate for eight years.
“What lobby math can be used to try to make this look like an increase?” Pscholka asked.
“This is the same rate going forward until 2025,” he continued. “The one thing I hear from businesses is ‘We want predictability.’ I don’t think you can get any more predictability than this.

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